House Debt-Cap Conditions Hit Resistance in Budget Fight

House Speaker John Boehner, a Republican from Ohio, listens during a news conference following a meeting in Washington, D.C. on Sept. 26, 2013. Photographer: Andrew Harrer/Bloomberg

Sept. 26 (Bloomberg) -- House Republican leaders are
considering a delay in debt-ceiling proposal, according to a
congressional aide, as the Senate plans to vote tomorrow on a
spending bill to avoid a government shutdown in four days.

House Speaker John Boehner had outlined a plan that would
pair spending cuts, looser regulations and a delay in Obamacare
with an increase in U.S. borrowing authority to Republican
members earlier today, drawing some opposition. Starting
tomorrow, Republicans will hold a 232-200 House majority, and
can lose only 15 members on a party-line vote.

Representatives Paul Broun of Georgia, Louie Gohmert of
Texas, Tim Huelskamp of Kansas and Mo Brooks of Alabama said
they would oppose the leadership’s debt-limit measure. Others
including Michele Bachmann of Minnesota and Tom Price of Georgia
said they support it.

In the Senate today, Majority Leader Harry Reid failed in a
bid to win unanimous consent for a vote tonight on the stopgap
spending bill as Republican Mike Lee of Utah objected. The
Senate will hold several votes tomorrow on the stopgap bill,
which party leaders said will exclude the Republican language
denying funds for the health-care law.

Reid, a Nevada Democrat, on the Senate floor grew agitated
after Lee objected to his request to set a vote on the measure
tonight.

After Lee and Ted Cruz, the Texas Republican who spoke for
more than 21 hours against Obamacare this week, voiced their
objections, Senator Bob Corker, a Tennessee Republican, said he
was confused that both men wanted to delay the vote.

More Time

“It’s not the Republican side that’s asking to stall,”
Corker said. “We only have two Republican senators who are
asking to put this off” and most party members ’’would actually
like to give the House time to respond in an adequate way.’’

In 2011, Boehner had supported a dollar-for-dollar match
between spending cuts and the debt ceiling increase. Now, he’s
pairing “reforms and cuts” with the debt-limit increase and
counting the expected revenue that would stem from faster growth
caused by lighter regulation.

“This debt-ceiling package does not fix the underlying
cause of the problem, which are the deficits,” Brooks told
reporters at the Capitol today. “We need to significantly cut
government spending.”

The Republican bill will seek to increase means-testing for
Medicare, reduce the Medicaid provider tax, revise medical
malpractice law and eliminate a public-health fund as part of
the 2010 law. Republicans also want to eliminate a tax on
medical devices and require a Social Security number in order to
receive a child tax credit, according to the proposal.

Republican Opposition

Huelskamp, who opposed Boehner as House speaker, said he
doesn’t support the leaders’ debt-limit bill. At this point, he
said “at least 18” members would oppose the measure.

“It looks like a $1 trillion increase and it doesn’t meet
the Boehner one-for-one rule,” he said in an interview. He said
the bill also doesn’t balance the U.S. budget in 10 years.

U.S. stocks rose, ending the longest slump this year for
the Standard & Poor’s 500 Index, after an unexpected drop in
jobless claims overshadowed growing concern that a budget
impasse could hurt the economic recovery.

Public Support

Republicans said they think they can force President Barack
Obama to accept concessions, although he has said repeatedly
that he won’t negotiate on the debt limit. According to a
Bloomberg National Poll conducted Sept. 20-23, 61 percent say
that it’s “right to require spending cuts when the debt ceiling
is raised even if it risks default,” because Congress lacks
spending discipline.

Obama said Republicans are becoming increasingly
“irresponsible” in their attempts to thwart the health-care
law and are trying to “blackmail” him.

“I will not negotiate on anything when it comes to the
full faith and credit of the United States,” Obama said in a
speech today to promote his health-care law at Prince George’s
Community College in Largo, Maryland, a suburb of Washington.
“Congress needs to put an end to governing crisis-to-crisis.”

In the House, Republican leaders are laying out their plans
for a debt-limit increase to rally members behind a list of
party priorities while they wait for the Senate to complete
action on stopgap spending legislation to keep the government
operating when funding runs out Sept. 30.

Representative John Fleming, a Louisiana Republican, said
House Republicans would “continue to fight” for limits on the
health-care law in the spending bill. Fleming said leaders also
discussed contingency plans for a shutdown.

‘Can’t Control’

“There is always a possibility, that is not the goal at
all, we don’t want to shut down government but we can’t control
what the Senate does,” Fleming said.

The Democratic-controlled Senate is poised to strip out
Republican language that would choke off funds for the 2010
health-care law and vote sometime before Sept. 28 then will send
the bill back to the House. The Senate proposal would fund the
government through Nov. 15.

Senator Richard Durbin of Illinois, the chamber’s second
ranking Democrat, said it wouldn’t be responsible for the Senate
to take longer than necessary to return send the proposal back
to the House.

“What we’re trying to do is a responsible, adult approach:
Do it in a timely fashion so that agencies of government are not
sweating bullets about Tuesday morning,” Durbin said. “We’re
not playing games here and waiting until the last minute. We’re
trying to get this done as quickly as we can.”

Speaker Boehner

Boehner, an Ohio Republican, said today the House wouldn’t
pass a “clean” spending bill after the Senate acts. House
leaders have been mulling attaching a repeal of an excise tax on
medical devices, limits on government health-care coverage for
members of Congress and other items.

“We have no interest in seeing the government shut down,”
Boehner said. “There will be options available to us, there
aren’t going to be speculations about what we’re going to do or
not do, until the Senate passes their bill.”

Reid has urged his colleagues to speed up the process on
the spending bill.

“We know what the end is like here -- that we can finish
this some time Saturday -- but it would seem to me that we
should do everything we can to get this back to the House as
soon as possible,” Reid said today.

In ‘Ditch’

Reid said as of now Republicans “don’t know what they’re
going to do.” He said House Republicans are in a “ditch,”
adding that he hadn’t had “a single conversation” with Boehner
in recent days.

“There’s no need for conversations.” he said. “We’ve
spoken loudly and clearly and we have the support of the
president of the United States and that’s pretty good.”

The divided Congress is still in the early stages of a
dispute that will play out over the next few weeks as the U.S.
nears the end of its fiscal 2013 spending authority and reaches
the $16.7 trillion cap on borrowing.

Today, the Senate debated a proposal from Reid that would
restore funding for the health law -- Obama’s signature
legislative achievement -- and pay for government operations
through Nov. 15, a month shorter than the funding expiration
date in a measure passed by House last week.

With a few exceptions, Democrats are steadfast as they fend
off major policy changes in the health law, particularly if
attached to what they see as a routine bill to keep the
government running or legislation to prevent a first-ever U.S.
default.

Playing ‘Poker’

Republicans are “playing high-stakes poker with other
people’s money,” Durbin said. “The next step is to threaten
the debt ceiling. The victims will include not just federal
employees but employees all across America.”

Senator Joe Manchin, a West Virginia Democrat, said today
at a Bloomberg Government breakfast that he would support a one-year delay in the individual mandate to buy health insurance,
which begins in 2014, breaking with his party. He called a delay
“very reasonable and sensible.”

Senator Elizabeth Warren, a Massachusetts Democrat, at a
Financial Services Roundtable meeting, today urged executives of
financial institutions to speak out against using an increase in
the debt limit as a way to advance unrelated initiatives.

“Preventing an actual default -- a self-inflicted wound
that would cause a spike in interest rates and freeze in our
credit markets -- is clearly in your interests,” Warren said.

Senator Amy Klobuchar, a Minnesota Democrat and one of the
leading Senate repeal advocates, said she didn’t support adding
policy provisions to a short-term spending bill.

One-Year Delay

Republicans are considering a one-year delay in the
implementation of the health law’s individual mandate and
postponing the federal data hub connecting state health
exchanges with agencies including the Internal Revenue Service.

A delay of the independent payment advisory board is also
under consideration, they said. The board created under the law
must recommend policies to Congress to help Medicare provide
better care at lower costs, according to the White House.

Without congressional action, the government will run out
of borrowing authority on Oct. 17, Treasury Secretary Jacob J.
Lew told lawmakers yesterday.

After that, the government would be operate on a cash basis
and would be unable to pay its bills sometime from Oct. 22 to
Oct. 31, the Congressional Budget Office said.